Infosys reported a 2.2% quarter-on-quarter constant currency (CC) revenue growth in Q2FY26, slightly above estimates of 1.8%. However, EBIT margins came in at 21%, missing expectations of 21.3%.
The company narrowed its FY26 revenue growth guidance to 2-3% YoY CC, compared with 1-3% earlier, in line with expectations. Despite sequential growth of 2.6% in Q1 and 2.2% in Q2, the Street was disappointed that the upper end of the guidance was not raised.To achieve the top end of its FY26 guidance (3% growth), Infosys would effectively need flat growth over the next two quarters.
What brokerage recommend
Despite the muted near-term outlook, analysts have largely maintained their ratings and target prices. The consensus target implies an upside of about 16.1% from current levels.Nomura maintained a ‘Buy’ rating with a target price of ₹1,720, saying a marginal revenue beat in Q2 and an increase in the lower end of FY26 guidance. It expects margins to remain stable at around 21%, with the stock trading at 19.8x FY27F EPS.
Jefferies also retained its ‘Buy’ recommendation with a target of ₹1,700, citing Q2 revenue growth of 2.2% QoQ CC and large deal wins worth $3.1 billion.
The brokerage said the raised lower end of guidance points to a soft H2FY26, but expects Infosys to deliver a 6% EPS CAGR over FY26-28.
HSBC reiterated its ‘Buy’ rating with a target price of ₹1,730, calling Q2 “a shade better than expectations” given steady deal wins and management’s confidence in the pipeline. It said margins are likely to hold steady, aided by cost rationalisation, rupee weakness, and AI-driven productivity gains.
HSBC added that IT spending may accelerate next year as US macro visibility improves, which could benefit Infosys.
Out of 51 analysts tracking Infosys, 36 have a ‘Buy’ rating, 13 recommend ‘Hold’, and only two have a ‘Sell’ call on the stock.
